This paper examines the small signal stability problem and proposes a methodology for understanding how the generation dispatch and tie line power flow affect the inter area mode damping. The proposed methodology applies numerical sensitivity analysis. Mode sensitivity is achieved by considering three different systems evaluated under different operating conditions. The analysis carried out in this paper demonstrates that the effect of generation dispatch and line power flow on power system stability highly depends on active power provided by generators with high participation factors in power system inter-area modes. Results of this paper can be used by power system operators and planners to improve power system stability by defining generation dispatch taking into account small signal stability issues.